A deal is in the works to provide up to $5 million to the cash-starved New York Racing Association from the sale of land near Aqueduct to the Port Authority of New York and New Jersey. The plan, which was approved by the Port Authority, still needs final approval from state regulators and NYRA, which has been scrambling to raise money to avoid bankruptcy. A new state NYRA oversight panel said in a statement Friday that the Port Authority gave the go-ahead to start negotiations with NYRA to purchase land near Aqueduct that is not used for racing. The Port Authority would use the land for unknown economic development purposes at nearby JFK International Airport. "An amount equal to the funds received by NYRA from the sale of this land, which would not exceed $5 million, will be reinvested in capital assets of the racing franchise after NYRA's Aqueduct VLT facility become operational,'' the oversight board said in a written statement. NYRA officials were cautious in assessing the proposal. "We're going to continue to work with the state to reach an agreement that will allow us to keep racing going without any interruption,'' said NYRA spokesman William Nader. The Port Authority plan comes several months after NYRA first floated a proposal to sell 80 parcels of land - about 9 acres - around Aqueduct that is mostly in residential areas. Nader said he did not believe the Port Authority land deal would be for those 80 parcels; he could not provide information about how much land would be involved. "It's gratifying to know the ongoing discussions are moving along to try to find a reasonable solution to our cash crunch,'' Nader said. NYRA had said it needed to raise at least $20 million in the months ahead to avoid insolvency. Bankruptcy, cutting back on racing dates, lowering purses, and slashing retiree health insurance programs have all been thrown on the table by NYRA as possible effects of the cash crunch. The possible deal with the Port Authority comes after state officials have so far denied NYRA's bid to sell the 80 parcels of land near Aqueduct. It also comes a week after state officials nixed a plan by NYRA to sell off equine artwork from its holdings. State officials said the land sale to the Port Authority would not affect racing operations at Aqueduct. They said NYRA would be required to reinvest an amount equal to the proceeds of the land sale into capital assets of the racing franchise when NYRA's VLT facilities become operational. NYRA's VLT facility at Aqueduct is scheduled to open by the end of next year. The land sale would be contingent upon NYRA agreeing to maintain the land until the Port Authority figures out what it wants to do with the property. The proposed sale's proceeds would be held in escrow by NYRA and could only be tapped upon the approval of the state oversight board.